The following are four differences between monopoly and perfect competition. Whi

Question

The following are four differences between monopoly and perfect competition. Which of these is incorrect? A. A monopolist has a large market share while a perfect competitor does not. B. Unlike a perfectly competitive firm, a monopoly can make positive economic profits in the long run. C. A monopoly will charge a higher price and produce a smaller quantity than a competitive market with the same demand and cost structure. D. Monopoly profits can continue to exist in the long run, because the monopoly produces more and charges a higher price than a comparable perfectly competitive industry.

Explanation / Answer

1. d. monopoly profits can continue to exist in the long run, because the monopoly produces more and charges a higher price than a comparable perfectly competitive industry.

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